accounting 3 chapter 21 section 3. preparing plant asset records a separate record is kept for each...
TRANSCRIPT
Accounting 3Accounting 3
Chapter 21Chapter 21
Section 3Section 3
Preparing Plant Asset RecordsPreparing Plant Asset Records
A separate record is kept for each plant A separate record is kept for each plant asset. This is called a asset. This is called a Plant Asset RecordPlant Asset Record..
Section 1 is prepared when the asset is Section 1 is prepared when the asset is purchased. It includes, the description, purchased. It includes, the description, account numbers, serial numbers, cost, account numbers, serial numbers, cost, etc.etc.
Section 2 provides space for recording the Section 2 provides space for recording the disposal information of the asset when it is disposal information of the asset when it is taken out of use.taken out of use.
Section 3 provides space for recording Section 3 provides space for recording annual depreciation expense and the annual depreciation expense and the changing book value each year it is used.changing book value each year it is used.
Plant Asset Record ExamplePlant Asset Record Example
Plant Asset Record No : ________ General Ledger Account No: __________
Description: ________________________ General Ledger Account: ___________________
Date Bought: _____________ Serial Number: __________________ Original Cost: _____________
Est. Useful Life: __________ Est. Salvage Value: _________ Depreciation Method: ___________ Disposed of: Discarded _________ Sold __________ Traded __________
Date: _________________ Disposal Amount: ____________________
Year Annual Depreciation Expense
Accumulated Depreciation Ending Book Value
Journalizing Annual Depreciation Journalizing Annual Depreciation ExpenseExpense
At the end of the fiscal year, after each At the end of the fiscal year, after each plant assets depreciation has been plant assets depreciation has been figured and recorded, the total figured and recorded, the total depreciation expense for all plant assets depreciation expense for all plant assets in the same plant asset account is in the same plant asset account is calculated.calculated.
In example, the depreciation expense of In example, the depreciation expense of all plant assets in the store equipment all plant assets in the store equipment account would need to be calculated.account would need to be calculated.
Journalizing Annual Depreciation Journalizing Annual Depreciation ExpenseExpense
To journalize the depreciation expense of a To journalize the depreciation expense of a plant asset account, an adjusting entry must plant asset account, an adjusting entry must be made using two accounts in the General be made using two accounts in the General Journal.Journal.
First is First is Depreciation Expense- (type of plant Depreciation Expense- (type of plant asset)asset). This account has a normal debit . This account has a normal debit balance and increases with a debit.balance and increases with a debit.
Second is Second is Accumulated Depreciation- (type Accumulated Depreciation- (type of plant asset)of plant asset). This account is used to keep . This account is used to keep track of all accumulated depreciation for track of all accumulated depreciation for each type of plant asset. It has a normal each type of plant asset. It has a normal credit balance (because it is a contra asset credit balance (because it is a contra asset account) and increases with a credit.account) and increases with a credit.
Winning Edge determined that total depreciation Winning Edge determined that total depreciation expense for store equipment is $8,750.00. After the expense for store equipment is $8,750.00. After the adjustment has been planned on the worksheet…adjustment has been planned on the worksheet…
General Journal Page ___
Date Account TitlePost
Ref.
Doc.
No.Debit Credit
15
31 Depreciation Expense-Store Equip.
8 7 5 0 00
Acc. Depr.-Store Equipment 8 7 5 0 00
Posting for this transaction is done in the same way any other posting for General Debit and Credit would be done.
Work Together p. 556On next four slides
Plant Asset Record No : ________ General Ledger Account No: __________
Description: ________________________ General Ledger Account: ___________________
Date Bought: _____________ Serial Number: __________________ Original Cost: _____________
Est. Useful Life: __________ Est. Salvage Value: _________ Depreciation Method: ___________ Disposed of: Discarded _________ Sold __________ Traded __________
Date: _________________ Disposal Amount: ____________________
Year Annual Depreciation Expense
Accumulated Depreciation Ending Book Value
134 1215
Television Store Equipment
January 4, 2001
15SG152 $700.00
3 years $100.00 Straight-Line
2001
2002
2003
$200.00
$200.00
$200.00
$200.00
$400.00
$600.00
$500.00
$300.00
$100.00
Plant Asset Record No : ________ General Ledger Account No: __________
Description: ________________________ General Ledger Account: ___________________
Date Bought: _____________ Serial Number: __________________ Original Cost: _____________
Est. Useful Life: __________ Est. Salvage Value: _________ Depreciation Method: ___________ Disposed of: Discarded _________ Sold __________ Traded __________
Date: _________________ Disposal Amount: ____________________
Year Annual Depreciation Expense
Accumulated Depreciation Ending Book Value
135 1205
Office Desk Office Equipment
May 27, 2001 GE572N $920.00
6 years $200.00 Straight Line
2001
2002
2003
$70.00
$120.00
$120.00
$70.00
$190.00
$310.00
$850.00
$730.00
$610.00
Account Title Trial Balance Adjustments
Debit DebitCredit Credit
Worksheet
Gabriel, Inc.
For Year Ended, December 31, 2003
Office Equipment 24 5 8 7 00
Accumulated Depreciation-Office Equipment 8 4 5 4 00
Depreciation Expense-Office Equipment
(f) 3 1 2 0 00
(f) 3 1 2 0 00
General Journal Page ___
Date Account TitlePost
Ref.
Doc.
No.Debit Credit
18
31
Adjusting Entries
Dec
Depreciation Expense-Office Equip
6120 3 1 2 0 00
Acc. Depreciation-Office Equip
1210 3 1 2 0 00
Account Acct No.
Date ItemPost
RefDebit Credit BALANCE
DEBIT CREDIT
Account Acct No.
Date ItemPost
RefDebit Credit BALANCE
DEBIT CREDIT
General Ledger
Accumulated Depreciation-Office Equipment
1210
Jan 1 Balance 8 4 5 4 00Dec 31 G18 3 1 2 0 00 11 5 7 4 00
Depreciation Expense-Office Equipment
6120
Dec 31 G18 3 1 2 0 00 3 1 2 0 00
AssignmentAssignment
Do Application 21-3 and 21-4 by Do Application 21-3 and 21-4 by hand.hand.
Turn it into Mrs. Middleton.Turn it into Mrs. Middleton.Move on to Section 21-4.Move on to Section 21-4.